Average grid generation rate4,500 MW
Number of oil spills in Nigeria since 20059,343
Opportunities in NigeriaJanuary 5, 2016
Mauro Bartezzati, managing director of Elper Oilfield Engineering, talks to TOGY about opportunities for engineering companies in the country’s economic climate and how Nigeria could strengthen its local industry in the long term. Elper Oilfield Engineering provides engineering and technical services for the country’s offshore oil and gas industry.
What can engineering, procurement, construction and installation (EPCI) companies do to survive in a period of sustained activity downturn?
During the current period of low prices, some companies may chase after as many projects or tenders as possible to ensure their market position. Exclusivity means that companies will be spending more money throughout the country without the guarantee of being successful. The company will know all angles of the project and will have a definite target identified for further projects. EPCI companies need to be concentrated on diversifying and building up exclusivity in the market during these times.
Technical auditing services for Nigeria’s oil and gas facilities provide opportunities for EPCI companies. Most of the country’s pipelines, compression systems, gas-gathering systems and depots are around 35 years old. The Department of Petroleum Resources mandates an audit at least every one, two or three years to check the state of the facility.
How can EPCI companies diversify and find more business?
EPCI companies can diversify their portfolio by entering the environmental sector. Agencies responsible for environmental pollution clean-up from the oil and gas industry have contracts available for engineering companies on the technical side.
An example is the upcoming clean up of Gobi land, for which the United Nations and the Nigerian government have earmarked $1 billion. The Nigerian government planned to set aside tens of millions of dollars to perform a preliminary investigation.
Getting in on the upcoming tenders for that project, as well as others similar to it, are good ways to diversify a company’s portfolio and to work on projects that will help improve Nigeria’s hydrocarbons industry.
How can Nigeria build its inspection services capabilities in the long term?
Implementing the right technology for inspection can help companies in cost cutting. Installing electronic reporting systems that relay data back to a control centre for review would be the most efficient and cost effective method. Companies could use technology such as a laser photographic machine on either a remotely operated vehicle or on small drones to help with the integrity risk analysis and to relay any data about possible damage.
If a more in-depth analysis is required, robots and other systems along with human intervention can take the grid indentation analysis of composite microstructure and mechanics. This method comes at a relatively small cost compared with mobilising expatriates and hooking up a structure to reach the area or using divers to make the actual verification.
These types of technologies need to be manufactured and brought into Nigeria. Nigerians need the proper training on such equipment, which could be a long-term goal in developing local content and making the country less reliant on expatriates for technological services.
Foreign and local companies should be working towards this goal of domesticating technology and training more Nigerian personnel in these capacities.
Which sectors need foreign investment the most?
Optimising the gas-to-power value chain cannot be further delayed. To do this, Nigeria needs to incentivise gas producers, repair gas pipelines and refurbish power plants and transmission lines to boost the supply of electricity to the grid so that businesses can run in a cost-effective manner.
This, however, is a long-term answer. The immediate answer is to introduce embedded power plants, which requires gas. Nigeria needs investors to take any of these actions, and the best way to attract investors is with a free market. A free market and deregulation are the best way to encourage investment.
For more news and features on Nigeria, click here.